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innocent_white_lamb writes "Sony Music Entertainment Canada Inc., EMI Music Canada Inc., Universal Music Canada Inc. and Warner Music Canada Co. have agreed to pay songwriters and music publishers $47.5 million in damages for copyright infringement and overdue royalties to settle a class action lawsuit. 'The 2008 class action alleges that the record companies "exploited" music owners by reproducing and selling in excess of 300,000 song titles without securing licenses from the copyright owners and/or without paying the associated royalty payments. The record companies knowingly did so and kept a so-called "pending list" of unlicensed reproductions, setting aside $50 million for the issue, if it ever arose, court filings suggest.'"

Hey, fair is fair: if those dirty pirate scum had just waited to become major multinational corporations before they hit bittorrent, they would have been fine. But nooo, they just had to go downloading first...

What should have happened is, the MafiAA corps should have been forcibly disbanded, assets sold, and all singers and songwriters released from their slave-labor contracts [techdirt.com].

The double upside there is that we could get rid of the MafiAA companies and destroy the Payola system that still strangleholds music radio today. Maybe we'd have some real radio stations that would do things like play local artists, new acts simply because they like the sound, or even spin entire albums now and again.

Of course, we should probably reinstitute the media ownership limits. In 1995 there were over 5000 independent radio station companies, by 1997 five companies controlled 95% of the radio market.

IANAL. We don't have mass lawsuits in Canada like they do in the US. This isn't to say that the CRIA didn't try, but when they experimentally sued their first 29 filesharers in 2004, the judge (who incidentally is now chairperson of our telecoms regulator, the CRTC) ruled against their request for disclosure of the identities of the alleged fileshares. The cases then obviously were dead in the water, and I don't believe any have been filed since.

If you're interested in the reasons why the judge rejected the CRIA's request, the reasons why the request violated the rules established for such disclosures were:

1) The CRIA had hired a third party company, MediaSentry, to do the investigations, and the affadavit alleging evidence of infringement was signed by the president of this company, rather than the employees who did the investigation. As such, alleged evidence was hearsay, and not admissible.

2) MediaSentry had employed decoy music files, but did not verify that the alleged infringers had downloaded the actual songs in question and not the decoys, which they weren't being sued for. As such, no evidence was provided that the files in question were even the plaintiff's infringed files.

3) The CRIA alleged that the infringement was performed by various Kazaa usernames, but provided no evidence as to how they associated these usernames to the IPs for which they were seeking discovery. As such, there is no evidence that the IP was involved in the infringement.

4) The copyright act states that reproduction of an audio recording for private use by the copier does not constitute copyright infringement, and so the alleged downloading of the MP3 files did not constitute copyright infringement

5) No evidence was provided that the alleged infringers had distributed or authorized the reproduction of the files, merely that they had placed personal copies in a location that was accessible to others, and this does not constitute copyright infringement. Others accessing the accessible files is not copyright infringement, the user must take a positive act of sending the files themselves.

6) The CRIA alleged secondary infringement, but didn't even try to establish knowledge on the part of the defendants

7) The lawsuits were filed long after the infringement was alleged to have taken place (about a year), and retrieving the information requested (contact info of the person using the IP at the time) over such a long period of time was not practical or reasonable, and quite likely not even possible. Furthermore, the contact info of the account holder that owned the IP is not necessarily the same as the person who committed the infringement on the computer.

8) The great length of time between the alleged infringement and the filing of the lawsuit causes privacy concerns to outweigh the copyrights of the plaintiffs, since they gave no reason as to why they waited so long. I think the idea here was that clearly the damage caused wasn't terribly important since they waited so long.

The ruling in the end denies the CRIA's motion, and granted costs to the ISPs who participated. So the CRIA's attempt to try mass lawsuits US-style imploded in a spectacular manner. Without major changes to Canadian law, such lawsuits are impossible.

Deregulating the radio industry was a horrible mistake that sounded like a good idea at the time (and I was far from a Clinton fan). You're right... it's all Clear Channel and a handful of others. There are still a few nice indie stations (great one in New Braunfels that I can pick up sometimes) but it's not like it was.

When I was in Nashville in the late 90s, Clear Channel was driving the reduction in playlist size as well. Not only were artists and songwriters getting cut out, it was getting more difficult to get radio play (where songwriters and artists get a few pennies per play).

The numbers in that article don't jibe very well though. Only idiot bands and previous megahit makers spend that kind of money recording an album. And the numbers get that high because of catering and nightlife. In 1998, AFM scale for each musician for a single song was $50, while some of the top earners for session work were getting $300. Currently scale can be up to about 3 times that (it varies from region to region, and some are still as low as 1998 numbers), but it's laddered based on amout of performance. Engineers made about $70/hr, and the studio got that much as well.

The typical manager cut is 10% or less, unless again the band is made up of idiots that are way too excited about getting a major deal to actually read the contract. However, it leaves out the agent/promoter cut too, which is 10% or less. It's not exactly a wash though, because that's only for live shows.

However, with all of the money needed to record and distribute, the band typically doesn't make a dime off of CDs until about 1MM in sales.

On the road though, the band does pretty well. Again, using 1998 numbers, the Dixie Chicks were making a minimum of $400k per show. They traveled with their own trucks, lights, sound equipment, etc... so a large portion of that went to putting it all together. However, at the end of the night, they were likely splitting about $60k between the three of them. Bands of less notoriety typically have a backline setup as part of the rider. Also, equipment manufacturers are very easy to get B endorsements (items at cost) out of, and fairly easy to get A endorsements (free stuff) out of if the band has any radio play at all.

The band has to pay for travel expenses, but rarely if at all pays for hotels and meals. Again, AFM scale was $50 per show in town, $200 per show out of town, with a $35/day per diem. That also hasn't changed much.

Artists these days make their money on the road, and produce CDs to drive the butts to the seats. And they can make a pretty nice living at it. The recording industry (outside of self and indie labels) is a sham.

And on Payola, Sony learned a long time ago the fines for getting caught were nothing compared to the amount of $$ they made by pushing their artists onto the radio. Give harsher penalties and they might reconsider.

"let's try this illegal thing! Maybe we won't get caught and we can keep the 50 million. if we do, what harm?"

It's a bit more insidious than that. This 50 million wasn't just sitting in a trash bag under the CEO's desk. It was out there, making interest. So they profited from their copyright infringement. Their punishment should be worse!

"let's try this illegal thing! Maybe we won't get caught and we can keep the 50 million. if we do, what harm?"

It's a bit more insidious than that. This 50 million wasn't just sitting in a trash bag under the CEO's desk. It was out there, making interest. So they profited from their copyright infringement. Their punishment should be worse!

I wouldn't say that. I'm sure that for every pirate out there, the money they didn't pay had to go somewhere. Even if the suspect never had the extra money, that can be seen as debt avoidance, which is arguably the best investment you can make. The point is, I wouldn't want the court system going through a defendant's financial records, looking for ways to pile on new punishments.

$50m earning interest will still be a loss once paid. Unless they found a ridiculously awesome interest rate, or left it sitting for long enough to more than double. I don't see evidence of either, so overall it would be a loss.

$50m earning interest will still be a loss once paid. Unless they found a ridiculously awesome interest rate, or left it sitting for long enough to more than double. I don't see evidence of either, so overall it would be a loss.

Not really - they had already set aside that $50 million, "just in case". (And it turns out that they overbudgeted by 2.5 mil, so someone's getting a bonus for being under budget this year!). The difference is that rather than actually *pay* that money, they stuck it in the bank and collected interest. All that interest is profit for them (i.e. money they otherwise wouldn't have earned).

What bothers me about it is that there appears to be no punitive damages at all. It's like not putting payments down on your house but stashing the money aside, and when they finally come track you down, handing over the stash and saying "no harm no foul, right?"

You could easily make a case for $150,000 per song because they willingly and knowingly used songs for which they did not procure the rights for. Willful and Systemic infringement rather than casual infringement. The only way to make it not happen again is to make it so they have a huge loss over it.

As they were selling the songs, as opposed to merely collecting them, they were engaged in criminal copyright infringement for commercial purposes, which in the US carries a prison sentence of up to 10 years (for the sheer number of unlicensed units sold). Read more about it here [cornell.edu]. These folks should be looking at jail time, not merely being forced to purchase what they originally should have.

If they put aside $50M, then the real value to them was at least $150M. So, they made at least $100M on the settlement.

Not bad business, not a crime, not ethical..., but it is good business for many of the big-bro-companies.

RIAA protects the wealthy from the artist. Patents protects the wealthy from scientist, engineers, inventors.... Copyright protects the wealthy from all the other crap. Congress protects the wealthy from US.

This is what corporate welfare and protectionism is all about for US, EU... Glob

You missed the obvious question: How on earth did the damages end up within 5% of what they had set aside? Using the per infringement figure, they set aside $167 and paid $158 when the statuatory damages [wikipedia.org] range from $750 to $150,000? Wtf is going on here?

Obviously, they paid 2.5M for the lawyers. If this was budgeted from the start it explains why the figure "randomly" ended up being exactly 5% of the total set aside. This means the plaintiff's lawyers simply accepted the 47.5M the labels had set aside.

Guessing here, but I don't think they can hold out long trying to say a song is "worth" a different amount in Canada vs. the US. I still think it counts as an informational precedent to point to for the next case that comes up in the US.

It's more or less the actual amount owed to the artists for licencing. They claimed they couldn't pay it out because they couldn't identify the artists on the pending list, but of course they didn't try very hard. The class action suit merely convinced them that it was simpler to just turn over the owed money as a settlement (presumably keeping the interest) to the plaintiffs, rather than identifying and paying the individual artists.

They're cleared of all liability and they've agreed to try a little harder next time, but there are no damages, statutory or otherwise. They're paying out only the owed royalties, just delayed for a few years (would've been indefinitely, but they got called on it).

INAL, but this could be a GOOD thing. Now when someone gets sued by the RIAA they can point to this case and say that they should only be paying the RIAA $167 per track, as per this example. They could perhaps even argue to pay less as they had no business interest in the infringement, unlike in this instance.

I suspect that $167 per track is close to what they would expect to pay for a licence up front*. Perhaps individuals could do the same. Set aside what it costs to "licence" an album legally, $15 should do it, then go ahead and pirate the album.

Just be sure to keep your "pending" list and coin jar handy for when the recording studios come knocking.

* Can it really be an average of just $167 per track for a commercial licence? That seems lower than I would expect.

Don't forget that the RIAA factor in the costs of the record companies whereas this is just compensation for the artists.

However, it does show that the companies are screwing over everyone by taking the lion's share of the profit. Okay, they do a lot of work for it, but the disparity is enormous. I can understand most published musicians seeing this and wondering why they are getting a tiny fraction of the takings. Most people are happy to pay if the artist gets fairly compensated but this doesn't seem equi

If you're an unproven band, and you want to record an album, you pay all your studio costs, along with a bunch of other crap. Then, the record company takes their share of profits, before you ever see a dime.

It's worse than a MAFIA protection racket, loan shark, and government taxation combined.

I suspect that $167 per track is close to what they would expect to pay for a licence up front*. Perhaps individuals could do the same. Set aside what it costs to "licence" an album legally, $15 should do it, then go ahead and pirate the album.

Bear in mind that your "$15 should do it" refers to a license to download a copy of an album, not the price for a license to distribute an album. While you pay a dollar for a song on iTunes, Apple pays much more than a single dollar to the record companies for a license to distribute. So, set aside quite a bit more, or never, ever upload.

I'm a bit surprised that they were allowed to settle. The statutory penalty for copyright infringement in the USA is $750-$30,000. Why would the class settle for less than the minimum statutory penalty? If they'd managed to get somewhere in the middle of the damages range, then it would have been significantly more than the total lifetime profits for the songs, so the labels might have been less inclined to lobby for ludicrous penalties.

Why would the class settle for less than the minimum statutory penalty?

Because class action lawsuits are primarily for the benefit of the lawyers, not the class members. This way, the lawyers get a big payout without actually having to do any work. And the musicians get screwed yet again.

In cases like this sometimes I wonder if it's beyond that, that the company and the class action lawyers collude to screw the class. That they purposely get themselves sued by "friendly" lawyers who settle for peanuts so they have legal immunity from everyone who didn't opt out of the class. Mass commercial copyright violation sounds more like a federal crime worthy of prison time than this.

It's unclear to me to what extent there was any actual infringement. As I understand it, the artists agreed to have the CMRRA represent their interests with regard to licencing their work. The CMRRA then set up an agreement that allowed the recording companies to use a work and pay for it later. Which they never did.

It may be that proving infringement in court would be difficult due to the existing agreement. Probably, it would be more like a breach of contract. It's tough to know what case could have been made for infringement, but it certainly would be a tough legal battle. Too bad, that would have been very, very fun to watch.

Canada is a different country, but the labels are working on world wide copyright concepts. If they try to hide behind "country of action" type games then someone can just try hosting a server in a country with zilch for copyright law.

The commercial one, in which benevolent publicly-traded corporations profit form the work of unpaid artists and the evil non-commercial kind, performed by individuals, which doesn't generate any profit at all.

The non commercial one is of course far more immoral and dangerous to society, and it should be punished to the full extent of the law (in this case $1,920,000 in statutory damages [wikimedia.org] for sharing 24 songs).

In this case, they settled out of court with the artists. So, maybe the artists could have pursued the case further and got 1000 times the money, or maybe they'd have lost. They took the safe option that didn't piss off their employers too badly.

Actually, they paid less than zero penalty for each song. The $50 million was their estimate of the royalties owed if they had paid up front like they should have. So the $47 million is less than the estimated royalties cost, and nothing for penalties. I'd say all future RIAA lawsuits should use this benchmark for sure...

Not to defend it, but in the RIAA's case, there's statutory damages of $750-$150000 available because they registered their copyrighted material. Here, it's likely that those songwriters did not register - accordingly, they only have actual damages available, rather than statutory damages. Actual damages could be more - see Apple v. Psystar - or they could be much less, like here. The statutory damages aim for the middle ground.

IANAL but in Canada, suing for damages is a bit different from the US... my understanding is that damages awards for loss have to be consistent with actual, concrete, demonstrable loss. I know that these things get complex and follow some convoluted paths, at least to the non-lawyers, but I was given this example. Say I offer to sell you a car at $1000 less than the going rate and you accept but before you come over to pay and collect the vehicle, I sell the car to someone else. You can sue me for damages but you are basically limited to the $1000 difference between the going rate and my original offer to sell. Now that's straight damages. I don't believe there are any statutory damages for copyright.

Bill C32 I think, changes that. It introduces American style "statutory" damages with a minimum per instance (er... $100 non-commercial and $200 commercial) for copyright violations. The maximums are much higher ($5000 for commercial). The Bill has passed second reading, still needs third reading and to pass in the senate. It is not yet in force:

So... you have to think that there is some house-cleaning going on. Currently, the damages would be limited to actual license costs plus possibly legal fees, hence the ability for the association to set aside an exact amount for the settlement. They have been thinking about this for a long time.

I believe that the industry association has a vested interest to get this matter out of the way in prep for the passing of C32, which could push the damages up significantly, as high as $1.5 Billion. I would also be suspicious that the Heritage Minister is involved here somewhere and strong armed the artists to accept the industry settlement so that Bill C32 could be put into place without any embarassing fallout. The argument would be that C32 is good for the artists so accept this and be done with it. I think that everyone involved in the settlement is doing the ol' nod nod wink wink.

There has been a long running difference in view between Heritage Canada (artists, er... proponent of blank CD/DVD surcharges) and Industry Canada (resp. for telecom, ISPs, etc and traditionally against making ISPs etc responsible for infringing data transmission). I would bet money that the two ministries have been settling differences behind the scenes and in cabinet. This "settlement" is just one item on a long list of to-do items that are part of aligning Canadian copyright law with American law. I am not saying there is conspiracy but there is an expected amount of co-ordination and deal making within the Conservative party cabinet. Okay.... maybe it IS a conspiracy;->

One thing is for certain: a lot of shit has been going on behind the scenes in this story.

Another commenter made the point that the only reason they got off this easy is because the plaintiff settled out of court for less. So, this would not set any legal precedent because it never went to a decision.

Actually, while not a precedent, it could certainly be used as evidence in a filesharing case.

If Joe gets sued for filesharing, and the music industry is asking for $100,000 per song, then Joe can hold up this settlement, and ask the music industry "Didn't you push to settle this case for $167 per song when you were infringing copyright? So according to your own published statements, that is a legitimate value for a copied song, correct? So this $100,000 per song that you are asking for could be lowered t

The worlds smallest violin plays for the labels.
They did something they knew was wrong, and set aside the monies they would need to pay just in case they got called on it? How is it this kind of corporate behavior is allowed?
I look forward to the day when these labels are less relevant in what becomes popular. It is coming, with success stories such as pamplemoose [youtube.com], we should start seeing more music acts starting up without needing labels in the first place.

Im not sure how they operate in Canada, but I always hear about US artists being signed to labels for x number of albums. Any of the work done for those albums belongs to the label, and artists must fulfill their obligations before anything is their own again.

A very high percentage of the Fortune 500 companies have been convicted of felonies, sometimes serious felonies, in relatively recent history. The reason is simple: The cost of getting caught is lower than the extra profits they can make by breaking the law. That's assuming 100% enforcement, which almost never happens.

You are mistaken. How do you account that money properly? It was incoming money, either reported as profit or unreported by accounting trickery. If it was counted as profit already, they already got taxed on it and had a net loss of 47.5 million for the lawsuit. If unreported, they spent less on legal issues than they thought and have to report $2.5M in unreported profit that already existed from wherever they get money.

Do you buy something, it comes up lower than you thought, and have to declare the di

Can this be used in future courts as a precedent? I mean, they were not only sharing files illegally, they were actually selling them too and thus profiteering from it, they were sharing them with not only thousands but tens of thousands, yet they only had to pay a bit over $100 per song. Thus, a person at home sharing a music file, not profiteering from it, and perhaps only sharing it with tens or at max hundreds shouldn't have to pay nearly as much per song.

I am actually interested in knowing cos if this can be used as a precedent then MAFIAA just got shot hard in the foot.

Nope. It was settled out of court and even then, it was a tort, handled in civil court. No presidence, but it can likely be pointed at if the judge allows it as evidence. It might be of more use to people appealing the fines though.

Can this be used in future courts as a precedent? I mean, they were not only sharing files illegally, they were actually selling them too and thus profiteering from it, they were sharing them with not only thousands but tens of thousands, yet they only had to pay a bit over $100 per song. Thus, a person at home sharing a music file, not profiteering from it, and perhaps only sharing it with tens or at max hundreds shouldn't have to pay nearly as much per song.

I am actually interested in knowing cos if this can be used as a precedent then MAFIAA just got shot hard in the foot.

Nope. Under US law, there are two separate and independent alternatives for determining damages. The first, that we know and hate, is statutory damages between $750-$150000 per work. These are available to people who register their works with the copyright office (which likely wasn't done here, and so weren't available to the class). Essentially, the statutory damages are an incentive for people to register their works (and thus build up the Library of Congress). The second is actual damages, which mus

I have absolutely no respect for companies like Sony that have in their libraries huge quantities of pd music performed by great artists like Wilhelm Kempf, Karl Bohm, Lenard Bernstein, George Szell etc, etc...and on and on. Here they are not making it available to willing buyers and just sitting on it like a bunch of trolls at a bridge stopping travelers through the world of classical music.

This is why it is almost impossible for new classical artists to break through anymore. There is no way for plebs to experience great classical music as there was during the heydays of the 1960-70s when you could by classical lps just about anywhere..including low end stores like K-Mart, or Sears!

This greedy amoral cartel has absolutely no respect for the legacy of great music that is part of our heritage and deserve to be taken apart and given a financial drubbing for their behaviour!

I speak as a grieving Old_Flatulent classical musician that hopes eventually the corrupt entertainment industry system that stops great artists from blooming will eventually die.

What about them? Seriously, what? Most people don't get to keep getting paid after they died, after all.

How about this. Someonewrites a killer song. They license it to a record label for, oh, 10 years, at $xx per year payable for each of the 10 years. Maybe (probably) they live, and the song stays under copyright, and the label has exclusivity. Maybe they don't, and after 8 years someone else can put out the same song. They (or in this case their estate) still get paid for 10 years, because they have

A judge still has to rule on this. Will s/he be having a look at the big picture ie. the seemingly intentional breaking of the law and the discrepancy between the perceived value of licensing depending on whether the music industry is payed or paying for it? IANAL and so wonder if the indignation and disbelief expressed here will also be felt by someone with legal power.

I thought the fee was $1000 per song or whatever the RIAA argued in that US case. It seems they are getting of rather lightly. Especially since they did this knowingly and in direct violation of signed agreements.

I would say any casual user could use this to set a low limit on the fee per song. They paid a little more than $100 per song title. And I expect each song title was reproduced several thousand times if not more.

Also what about seizing the physical devices that the RIAA used to make copies? If the